Novartis announced financial results for the first quarter of 2017.
Net sales grew two percent, as growth drivers offset Gleevec/Glivec generic erosion impact. Cosentyx showed strong growth in all three indications and Entresto grew steadily growing with better access in US and EU. Gilenya grew mainly driven by volume. Excluding Gleevec/Glivec, Oncology grew seven percent driven mainly by Promacta/Revolade, Jakavi, Tafinlar + Mekinist and Tasigna.
Core operating income are down five percent due to generic erosion and increased investments, mainly in Entresto and Alcon.
Net income declined 15 percent mainly due to a net charge related to the discontinuation of RLX030 as well as the decline in core operating income. Free cash flow grew $0.3 billion versus prior year, to $1.7 billion.
"Novartis delivered another solid performance in the first quarter," Joseph Jimenez, CEO of Novartis, said. "Growth drivers, including Cosentyx and Entresto, more than offset generic erosion, mainly due to Glivec. The innovation momentum continued in the quarter, led by the launch of Kisqali, and the FDA Priority Review for CTL019 in the US. This reinforces our confidence in our next growth phase, which we expect to start in 2018."
Net sales were $11.5 billion in the first quarter, as volume growth of seven percentage points was partially offset by the negative impact of generic competition and pricing. All divisions reported growth in constant currencies.
Operating income was $1.9 billion. Core adjustments amounted to $1.1 billion, including a net charge of $0.2 billion related to the discontinuation of RLX030 development.
Core operating income was $3.0 billion. Core operating income margin in constant currencies decreased 1.8 percentage points, mainly due to generic erosion of Gleevec/Glivec and investments behind new launches and the Alcon growth plan. Currency had a negative impact of 0.2 percentage points, resulting in a net decrease of 2.0 percentage points in US dollar terms to 26.1percent of net sales.
Net income was $1.7 billion, declining less than operating income due to higher income from associated companies. Core net income was $2.7 billion, declining less than core operating income due to higher income from associated companies.
Operating income was $1.7 billion due to generic erosion of Gleevec/Glivec, launch investments and the net charge of $0.2 billion related to the discontinuation of RLX030 development. Core operating income was $2.4 billion. Core operating income margin in constant currencies decreased by 1.7 percentage points due mainly to generic erosion and launch investments for Entresto, Cosentyx and Kisqali. Currency had a negative impact of 0.5 percentage points, resulting in a net decrease of 2.2 percentage points to 31.5 percent of net sales.
Sandoz net sales were $2.4 billion in the first quarter, as volume growth of 9 percentage points was offset by 8 percentage points of price erosion. Global sales of Biopharmaceuticals (including biosimilars, biopharmaceutical contract manufacturing and Glatopa) grew 30 percent to $274 million, driven by strong performance of Zarxio (filgrastim) and Glatopa 20mg in the US.
Operating income was $343 million. Core operating income was $460 million. Core operating income margin in constant currencies decreased by 1.3 percentage points, mainly due to higher M&S investment, including biosimilars, and higher Other Expense. Currency had a positive impact of 0.4 percentage points, resulting in a net decrease of 0.9 percentage points to 18.9percent of net sales.
Alcon net sales were $1.4 billion in the first quarter. Vision Care sales continued to grow, driven by strong performance of the daily contact lens portfolio, including continued double-digit growth of Dailies Total1. Surgical sales were down, mainly due to continued competitive pressures in IOLs.
Operating loss was $43 million, compared to an income of $31 million in the prior year quarter. Core operating income was $187 million. Core operating income margin decreased by 3.1 percentage points in constant currencies, mainly impacted by higher M&S investment. Currency had a negative impact of 0.7 percentage points, resulting in a net margin decrease of 3.8 percentage points to 13.2percent of net sales.
CTL019 was granted Priority Review by the FDA, in pe...
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